The Economic Impact of the Pill

Teaser:

The recent controversy over contraception and health insurance has focused on who should pay for the pill. But there is a wealth of economic evidence about the value of the pill – to taxpayers as well as to women in general.

The recent controversy over contraception[2] and health insurance[3]has focused[4]on who should pay for the pill. But there is a wealth of economic evidence about the value of the pill – to taxpayers[5], as my colleague Motoko Rich writes, as well as to women in general.

Indeed, as the economist Betsey Stevenson[6] has noted[7], a number of studies have shown that by allowing women to delay marriage and childbearing, the pill has also helped them invest in their skills and education, join the work force in greater numbers, move into higher-status and better-paying professions and make more money over all.

One of the most influential and frequently cited studies[8] of the impact the pill has had on women’s lives comes from Claudia Goldin and Lawrence F. Katz. The two Harvard economists argue that the pill gave women “far greater certainty regarding the pregnancy consequences of sex.” That “lowered the costs of engaging in long-term career investments,” freeing women to finish high school or go to college, for instance, rather than settling down.

[...]

A study[9] by Martha J. Bailey, Brad Hershbein and Amalia R. Miller helps assign a dollar value to those tectonic shifts. For instance, they show that young women who won access to the pill in the 1960s ended up earning an 8 percent premium on their hourly wages by age 50.